EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made this 3rd day of March,
1997, by and between CONVERGENT COMMUNICATIONS, INC., a Colorado corporation
whose address is 00 Xxxxxxxxx Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000
("Employer" or the "Company") and Xxxx Xxxxxx, an individual whose address is
0000 Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000 ("Employee").
R E C I T A L S
A. Employer desires to hire and employ Employee as Vice President,
Finance and Administration, of Employer or any of its affiliates in such
capacity of equal or greater responsibility, as provided herein; and
B. Employee desires to be employed by Employer as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. EMPLOYMENT. The Company agrees to employ Employee and Employee
hereby agrees to be employed by the Company and/or such of its subsidiaries
and affiliate corporations as determined by the Company on a full-time basis,
for the period and upon the terms and conditions hereinafter set forth.
2. CAPACITY AND DUTIES. Employee shall be employed as Vice President,
Finance and Administration, of Employer or any of its affiliates in such
capacity of equal or greater responsibility. During his employment, Employee
shall perform the duties and bear the responsibilities commensurate with his
position and as directed by the Chief Executive Officer of the Company and
shall serve the Company faithfully and to the best of his ability.
3. COMPENSATION AND BENEFITS.
3.1 The Company shall pay Employee during the Term of this
Agreement (or, if longer, during the term of Employee's employment with the
Company or any of its affiliates) an annual base salary, payable
semi-monthly. The annual base salary shall be One Hundred Fifteen Thousand
Dollars ($115,000.00 USD), adjustable for annual merit increases. In
addition to a base salary the Employee is eligible for an incentive bonus up
to 50% of base salary per year, and an incentive stock option plan, both of
which are at the discretion of the Board of Directors. Throughout the Term
of this Agreement (or, if longer, during the term of Employee's employment
with the Company or any of its affiliates), the Company shall pay Employee a
car allowance, payable semi-monthly..
3.2 In addition to salary as provided above, the Company shall
provide Employee during the Term of this Agreement (or, if longer, during the
term of Employee's employment with the Company or any of its affiliates),
with the benefits of such insurance plans, hospitalization plans, stock
plans, retirement plans and other employee fringe benefits (including sick
leave and four (4) weeks vacation time) as shall be generally provided to
similar positions within the Company and for which Employee may be eligible
under
the terms and conditions thereof. The Company reserves the right to modify,
delete or change its benefits at any time.
3.3 Throughout the Term of this Agreement, the Company shall
reimburse Employee for all reasonable out-of-pocket expenses incurred by
Employee in connection with the business of the Company and in performance of
his duties under this Agreement, upon presentation to the Company by Employee
of an itemized accounting of such expenses with reasonable supporting data.
4. TERM. The initial term of this Agreement shall commence on
March 3, 1997 and shall terminate on March 3, 1998 ("Term") and shall
continue thereafter from month to month, unless and until either party
terminates the Agreement pursuant to Section 5 below. The applicable
provisions of Sections 6, 7, 8, 9 and 10 shall remain in full force and
effect as provided and for the time periods specified in such Sections
notwithstanding the termination of this Agreement; all other obligations of
either party to the other under this Agreement shall terminate at the end of
the Term.
5. TERMINATION.
5.1 If, during the Term of this Agreement, Employee dies or is
prevented from performing his duties by reason of illness or incapacity for
one hundred forty (140) days in any one hundred eighty (180) day period, the
Company may terminate this Agreement, upon thirty (30) days prior notice
thereof to Employee or his duly appointed legal representative.
5.2 The Company or the Employee may terminate this Agreement upon
at least thirty (30) days prior notice to Employee upon the happening of any
of the following events:
5.2.1 The sale by the Company of substantially all of its
assets to a single purchaser or associated group of
purchasers who are not affiliates of the Company.
For the purposes of this Agreement, the term
"affiliate" means a person, firm or corporation that
directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is
under common control with the Company.
5.2.2 The sale, exchange or other disposition in one
transaction of eighty percent (80%) or more of the
outstanding voting stock of the Company to or with a
person, firm or corporation not then an affiliate of
the Company.
5.2.3 The merger or consolidation of the Company in a
transaction not involving an affiliate of the
Company in which the shareholders of the Company
receive less than fifty percent (50%) of the
outstanding voting stock of the new continuing
corporation.
5.2.4 A bona fide decision by the Company to terminate its
business and liquidate its assets (but only if such
liquidation is not part of a plan to carry on the
Company's business through its shareholders).
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5.3 The Company may terminate this Agreement at any time for
gross negligence or non-performance by Employee of any duty as an employee of
the Company which continues for a period of thirty (30) days after written
notice specifying such negligence or non-performance.
5.4 The Company may terminate this Agreement immediately upon the
intentional commission of a violation of any federal law, rule or regulation,
or any theft, fraud, embezzlement or similar crime involving the commission
of any felony, or for a material breach of any obligation or covenant created
by or under this Agreement.
5.5 Employer or Employee may terminate this Agreement without
cause upon at least thirty (30) days prior notice. Employee may also
terminate this Agreement if the Employer designates the Employee in a
capacity of lessor responsibility and Employee rejects such designation
pursuant to Section 2 herein.
5.6 If this Agreement is terminated by the Company under
subsections 5.1, 5.2 or 5.5 above, during the Term, or any renewal Term, the
Company shall continue to pay Employee's monthly base salary, as shall be in
effect on the termination date, for a period of twelve (12) months following
the date of termination ("Termination Fee"). No Termination Fee shall be
paid to Employee in the event that this Agreement is terminated for any other
reason, including, without limitation, pursuant to subsections 5.3 and 5.4
herein.
6. COVENANT NOT TO COMPETE.
6.1 During the Term of this Agreement (or, if longer, during the
term of Employee's employment with the Company or any of its affiliates) and
for a period of twelve (12) months after termination of this Agreement (or,
if later, termination of Employee's employment with the Company or any of its
affiliates), Employee shall not, directly or indirectly, own, manage,
operate, control, be employed by, or participate in the ownership,
management, operation or control of a business that is engaged in the same
business as the Company within any area or at any location constituting,
during the term of Employee's employment and/or at the time Employee's
employment is terminated, a Relevant Area. For the purposes of this Section
6, including all subsections of this Section 6, the business in which the
Company is engaged in is the voice and data telecommunications business,
including local and long distance services, network integration, network
monitoring, customer premise equipment, and network equipment leasing, and
which other services the Company provides, whether or not the Company is
authorized to provide and actually provides such services during the term of
Employee's employment ("Services"). The "Relevant Area" shall be defined for
the purposes of this Agreement as any area located within, or within fifty
(50) miles of, the legal boundaries or limits of any city within which the
Company or any parent, subsidiary or affiliate thereof is providing Services,
has commenced the acquisition of any authorizations, rights of way or
facilities or has commenced the construction of facilities for the purpose of
providing Services, or the Company has publicly announced or privately
disclosed in writing to Employee that it plans to provide Services.
6.2 During the Term of this Agreement (or, if longer, during the
term of Employee's
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employment with the Company or any of its affiliates) and for a period of
twenty-four (24) months after termination of this Agreement (or, if longer,
termination of Employee's employment with the Company or any of its
affiliates), Employee shall not (i) directly or indirectly cause or attempt
to cause any employee of the Company or any of its affiliates to leave the
employ of the Company or any affiliate, (ii) in any way interfere with the
relationship between the Company and any employee or between an affiliate and
any employee of the affiliate, (iii) directly or indirectly hire any employee
of the Company or any affiliate to work for any organization of which
Employee is an officer, director, employee, consultant, independent
contractor or owner of an equity or other financial interest, or (iv)
interfere or attempt to interfere with any transaction in which the Company
or any of its affiliates was involved during the Term of this Agreement or
Employee's employment, which ever is longer.
6.3 EMPLOYEE AGREES THAT, BECAUSE OF THE NATURE AND SENSITIVITY OF
THE INFORMATION TO WHICH HE WILL BE PRIVY AND BECAUSE OF THE NATURE AND
NATIONAL AND INTERNATIONAL SCOPE OF THE COMPANY'S BUSINESS, THE RESTRICTIONS
IN THIS SECTION 6 ARE FAIR AND REASONABLE.
7. CONFIDENTIAL INFORMATION.
7.1 The relationship between the Company and Employee is one of
confidence and trust. This relationship and the rights granted and duties
imposed by this Section shall continue until a date two (2) years from the
date Employee's employment is terminated.
7.2 As used in this Agreement (i) "Confidential Information" means
information disclosed to or acquired by Employee about the Company's plans,
products, processes and services including the Services and any Relevant
Area, including information relating to research, development, inventions,
manufacturing, purchasing, accounting, engineering, marketing, merchandising,
selling, pricing and tariffed or contractual terms, customer lists and
prospect lists or other market information, with respect to any of the
Company's then current business activities; and (ii) "Inventions" means any
inventions, discoveries, concepts and ideas, whether patentable or not,
including, without limitation, processes, methods, formulas, and techniques
(as well as related improvements and knowledge) that are based on or related
to Confidential Information, that pertain in any manner to the Company's then
currently used technology, expertise or business and that are made or
conceived by Employee, either solely or jointly with others, and while
employed by the Company or within six (6) months thereafter, whether or not
made or conceived during working hours or with the use of the Company's
facilities, materials or personnel.
7.3 Employee agrees that he shall at no time during the term of
his employment or at any time for a period of two (2) years thereafter
disclose any Confidential Information, Inventions or component thereof to any
person, firm or corporation to any extent or for any reason or purpose or use
any Confidential Information or component thereof for any purpose other than
the conduct of the Company's business.
7.4 Any Confidential Information, Invention or component thereof
that is directly or indirectly originated, developed or perfected to any
degree by Employee during the term of his employment by the Company shall be
and remain the sole property of the Company and shall be deemed trade secrets
of the Company.
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7.5 Upon termination of Employee's employment pursuant to any of
the provisions herein, Employee or his legal representative shall deliver to
the Company all originals and all duplicates and/or copies of all documents,
records, notebooks, and similar repositories of or containing Confidential
Information or subject matter then in his possession, whether prepared by him
or not.
7.6 EMPLOYEE AGREES THAT THE COVENANTS AND AGREEMENTS CONTAINED IN
THIS SECTION 7 ARE FAIR AND REASONABLE AND THAT NO WAIVER OR MODIFICATION OF
THIS SECTION OR ANY COVENANT OR CONDITION SET FORTH HEREIN SHALL BE VALID
UNLESS SET FORTH IN WRITING AND DULY EXECUTED BY THE PARTIES HERETO.
EMPLOYEE AGREES TO EXECUTE SUCH SEPARATE AND FURTHER CONFIDENTIALITY
AGREEMENTS EMBODYING AND ENLARGING UPON THE PROVISIONS OF THIS SECTION 7 AS
THE COMPANY MAY REASONABLY REQUEST.
8. INJUNCTIVE RELIEF. Upon a breach or threatened breach by Employee
of any of the provisions of Sections 6 and 7 of this Agreement, the Company
shall be entitled to an injunction restraining Employee from such breach
without a showing of damage as irreparable harm. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies for
such breach or threatened breach, including recovery of damages from Employee.
9. NO WAIVER. A waiver by the Company of a breach of any provision of
this Agreement by Employee shall not operate or be construed as a waiver of
any subsequent or other breach by Employee.
10. SEVERABILITY. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction
in which enforcement is sought. Accordingly, if any particular provision or
portion of this Agreement shall be adjudicated to be invalid or
unenforceable, this Agreement shall be deemed amended to delete therefrom the
portion thus adjudicated to be invalid or unenforceable, such deletion to
apply only with respect to the operation of such Section in the particular
jurisdiction in which such adjudication is made.
11. NOTICES. All communications, requests, consents and other notices
provided for in this Agreement shall be in writing and shall be deemed given
if mailed by first class mail, postage prepaid, certified or return receipt
requested to the addresses set forth above, or last known address and
received by the intended party. If the mailing is returned to the sender due
to an incorrect address, the correct address must be obtained in order for
the communication to be received and completed.
12. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Colorado.
13. ASSIGNMENT. The Company may assign its rights and obligations
under this Agreement to any affiliate of the Company or, subject to the
provisions of Section 5, to any acquirer of substantially all of the business
of the Company, and all covenants and agreements hereunder shall inure to the
benefit of and be enforceable by or against any such assignee. Neither this
Agreement nor any rights or duties hereunder may be assigned or delegated by
Employee.
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14. AMENDMENTS. No provision of this Agreement shall be altered,
amended, revoked or waived except by an instrument in writing, signed by each
party to this Agreement.
15. BINDING EFFECT. Except as otherwise provided herein, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective legal representatives, heirs, successors and
assigns.
16. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
17. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
and understanding of the parties and supersedes all prior understandings,
agreements or representations by or between the parties, whether written or
oral, which relate in any way to the subject matter hereof.
18. ARBITRATION. ANY DISPUTE ARISING OUT OF THIS AGREEMENT, THE
EMPLOYEE'S APPLICATION FOR EMPLOYMENT, THE EMPLOYEE'S RELATIONSHIP WITH THE
COMPANY, OR THE EMPLOYEE'S EMPLOYMENT OR SEPARATION FROM EMPLOYMENT SHALL BE
SUBJECT TO ARBITRATION PURSUANT TO THE COMPANY'S ARBITRATION PROCEDURES. THE
EMPLOYEE ACKNOWLEDGES THAT A COPY OF THE PROCEDURES HAS BEEN DELIVERED TO AND
READ BY THE EMPLOYEE PRIOR TO THE TIME HE/SHE EXECUTED THIS AGREEMENT. IT IS
UNDERSTOOD THAT ALL SECTIONS OF THE ARBITRATION PROCEDURES APPLY, EXCEPT
THOSE SECTIONS PERTAINING TO AT-WILL EMPLOYMENT, WHICH ARE SUPERSEDED BY THIS
EMPLOYMENT AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONVERGENT COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxx
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Title: CHIEF EXECUTIVE OFFICER
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EMPLOYEE:
/s/ Xxxx X. Xxxxxx
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(Signature)
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FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT ("Amendment") is made
this 13th day of April, 1998, by and between CONVERGENT COMMUNICATIONS, INC.,
a Colorado corporation ("Employer" or the "Company") and XXXX X. XXXXXX
("EMPLOYEE").
A. The Parties have entered into that certain Employment Agreement
dated March 3, 1997 ("Agreement");
B. The Parties desire to amend and modify certain of the terms and
conditions of the Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein and in the Agreement, the Parties agree as follows:
1. COMPENSATION AND BENEFITS. Section 3.1 of the Agreement shall be
amended to increase EMPLOYEE's annual base salary to One Hundred Thirty
Thousand Dollars ($130,000.00).
2. TERM. Section 4 of the Agreement shall be amended to extend the
Term for an additional three (3) years such that the Term of the Agreement
will terminate on March 3, 2001.
3. OTHER TERMS AND CONDITIONS. All other terms and conditions of the
Agreement shall remain in full force and effect, as if fully stated herein.
4. CAPITALIZED TERMS. Capitalized terms, and other defined terms,
shall have the same meaning as that accorded to them in the Agreement, unless
the context requires otherwise.
5. CONFLICT. If there are any conflicting terms or conditions between
the terms and conditions of this Amendment and the terms and conditions of
the Agreement, the terms and conditions of this Amendment shall control.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
to be executed by its duly authorized representative on the day and year
first above written.
CONVERGENT COMMUNICATIONS, INC., XXXX X. XXXXXX
a Colorado corporation
By /s/ Xxxx X. Xxxxx /s/ Xxxx X. Xxxxxx
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Its: Chairman and Chief Executive Officer
